How To Get Financially Fit & Ready For Baby
Today's guest post is by Manuela Andrysik. She helps others create financial security and freedom for a fabulous life. Find out more at her website here.
Prepare For Baby Financial Checklist
1. Review your spending NOW to ensure you can easily cover your commitments & living costs when baby arrives, and beyond.
2. Pay off any consumer debt. And do NOT go into more debt for baby stuff.
3. Boost your savings NOW while you have more income and before the additional baby expenses.
4. Talk to your employer, leader and/or Human Resources department regarding paid maternity leave entitlements, options & any other benefits or support they offer.
5. Contact the relevant government department (such as the Dept of Human Services in Australia), or check their website, to see if you will be eligible for payments or supplements such as – parental leave, baby bonus or newborn payment, family tax benefits, etc.
6. If you have private health insurance – contact the fund to ensure you know your obligations and get all the benefits.
7. Keep your baby purchases in check.
9. Wills & guardianship.
10. Do as much as possible NOW, well in advance of your baby’s birth, and put what you can on autopilot.
First I’d like to thank Julia for inviting me to contribute to this wonderful series.
If only there had been something like this when I was pregnant. It certainly would have made my journey to motherhood a lot easier.
Today I’d like to talk to you about financial health and fitness – and what you can do so that financial stress does not spoil what is such a miraculous & amazing time in your life.
The last thing you are going to want to worry about, or deal with, when you are holding your precious newborn in your arms, is money. So please review and sort out your finances now – before your bundle of joy arrives.
And to help you do just that, I have put together this Prepare For Baby Financial Checklist:
1. Review Your Spending NOW To Ensure You Can Easily Cover Your Commitments & Living Costs When The Baby Arrives, And Beyond.
First, take a close look at your current financial commitments & living expenses – mortgage or rent, utilities, food, transport, healthcare, insurance, etc.
Now consider what will change, and the additional baby & family expenses (nappies, medical insurance, clothes, child care, education, etc.) and add it all up.
Next, determine what your income will be after the baby is born.
Now compare your future estimated expenses to your future income. Will you be able to cover all your living and additional family costs comfortably? If not, now is the time to deal with it and make the necessary changes. Look at ways to reduce your spending and/or increase your income.
If you don’t know where to start, you can refer to my blog and Fab 5 Financial Flab Busters eBooklet at www.financiallyfitandfabulous.me.
2. Pay Off Any Consumer Debt. And Do NOT Go Into More Debt For Baby Stuff.
If you have any credit card debt, pay it off A.S.A.P. Then, only use the card if you can pay the full balance when due.
If you are struggling to do either or both of these things, carefully & honestly think about why, and what you can do to change things.
How did you come to be in this situation in the first place?
Are you living beyond your means?
Where can you make some savings?
What can you do to avoid outstanding credit card debt in the future?
Do you need to shred your credit card?
Do you need help?
This is not a time to go into more debt. Not even to buy baby stuff. I’ll give you some tips on how to keep baby purchases in check a little later in this podcast, but the key point I want to make now is DO NOT go into more debt. It’s not the time to offer more of your hard earned money to the banks (they have enough). It’s a time to spend wisely on the important stuff, and save for you and your growing family.
In regard to any other personal (non-investment) loans you may have:
IF they are not subject to early repayment penalties – pay them off as quickly as possible.
If they do have early repayment fees or penalties, first calculate whether you will be better or worse off paying them early.
3. Boost Your Savings NOW While You Have More Income And Before The Additional Baby Expenses.
Take a close and honest look at your spending habits and behaviours.
What are you spending your money on? Is it on things that are important and of value to you? Are you paying & rewarding yourself or just everyone else?
If you are not already, this is the time to stop spending on the unimportant and start saving for the important.
4. Talk To Your Employer, Leader And/Or Human Resources Department Regarding Paid Maternity Leave Entitlements, Options & Any Other Benefits Or Support They Offer.
Policies, options and benefits vary considerably from employer to employer. Ensure you understand your (and your partner’s) obligations and entitlements.
Ensure you give the required written notice before you plan to start your leave and when you intend to return.
5. Contact The Relevant Government Department (Such As The Dept Of Human Services In Australia), Or Check Their Website, To See If You Will Be Eligible For Payments Or Supplements Such As Parental Leave, Baby Bonus Or Newborn Payment, Family Tax Benefits, Etc.
Again, make sure you don’t miss out on any payments, supplements or support you can access.
Don’t assume. The entitlements change all the time. Ensure you get up-to-date information and you understand what you need to do to claim & receive any entitlements.
When my daughter was in child care 5+ years ago, the child care rebate was not income tested. I was stunned to discover how many parents had just assumed it was & therefore didn’t claim it. They had forfeited thousands of dollars each term.
6. If You Have Private Health Insurance – Contact The Fund To Ensure You Know Your Obligations And Get All The Benefits.
Each private health fund has different processes, products, benefits and support available.
My health fund surprised me with an array of unexpected extras. They sent me some great books & information; provided a medical hotline service; and gave me a choice of various “gifts” – including a huge bulk box of nappies.
It is also may be worth checking the latest government Medicare/Medicaid processes and requirements. Usually, your hospital or midwife will provide you with a Parent Pack which includes the relevant forms.
7. Keep Your Baby Purchases In Check.
Ask those that have recently had a baby about essential vs. the nice-to-have baby items. And prioritise those purchases.
Be aware of & don’t get swayed by marketing tactics. You can’t spend the same money twice, so you need to choose what to spend it on. Choose what you need, what’s important and means the most to you.
Always remember, marketers, are trained and paid to distract and entice you to spend more & spend it now. And they use an array of tactics to do so.
Guilt and fear marketing are particularly common tactics in the “mother and child” product segments. What “responsible” mother wouldn’t want her child to have “a multivitamin specially formulated to increase her child’s IQ by 4.327 points before he or she starts school”?
And, don’t try to keep up with the Joneses. They may not actually be all that happy.
They may be paddling furiously just to keep their heads above water. According to the Australian Bureau of Statistics, at the end of 2013, Australian households were indebted 1.8 times their disposable income .
Be true to your values, what is important to you and your family. Follow your own path & don’t let others distract you.
To quote Theodore Roosevelt,
“Comparison is the thief of joy.”
Know your prices.
Technology makes it quick and easy for you to check current prices and deals for whatever it is you are looking to buy. You can do a simple search on the internet or use price comparison sites.
Even if you don’t want to buy online, just knowing current prices is vital. You will know if a sale or discount price is genuine, and can confidently ask for a better price or discount if not.
If you’re not sure how to ask for a discount, refer to the Bonus Tip on page 14 of My Fab 5 Financial Flab Busters eBooklet.
Don’t buy everything before the birth.
You don’t know how large your baby will be. If you happen to have a larger baby those 000 and 00 clothes may not even fit.
Also, people are incredibly generous when a baby is born.
Wait. See how large your baby will be, and what gifts you receive.
When it comes to baby purchases, remember to spend and invest in the stuff that matters; you and your baby’s physical, mental & emotional health. The things that will reduce any worries and stress, and help you enjoy every moment.
Now the next few items I’m about to discuss can be tough to think about and deal with but are vital...
Personal Insurances, Wills & Guardianship
I’ve already mentioned Health Insurance. The other insurances you really do need to understand and review at this time are:
Life, Total and Permanent Disability (referred to as TPD), and Income Protection.
Life Insurance – pays a set amount to the beneficiaries nominated on the policy, if the insured person dies.
Total and Permanent Disability Cover – is designed to cover debt repayments, future livings costs, costs of rehabilitation and care, etc. if the insured person is totally and permanently disabled.
Income Protection – replaces the income lost if the insured is unable to work for a period, due to injury or sickness.
You may already have Life and TPD cover with your superannuation fund.
What you need to review and consider is:
How much cash you or your partner would have (e.g. in savings, investments, superannuation, other insurances, etc.)
How much you or your partner would need, and
How much you or your partner would like under each scenario.
Then consider what level of insurance you can afford. As is often the case, you may need to trade-off and prioritise.
Remember to always:
Read and understand what is included and excluded from each policy. Don’t hesitate to ask your financial planner, insurance broker, superannuation fund and/or the insurance company questions to ensure you understand the terms & conditions of any policies you have or are considering
Complete forms honestly and with full disclosure, particularly in regard to any pre-existing conditions, else your policy may be worthless.
9. Wills & Guardianship
God forbid something happens to you and/or your partner, you want to ensure your child or children are looked after - and in accordance with your wishes and values.
It is important to review and have a valid will so that your assets are distributed as per your wishes.
You can have a will written or updated by a solicitor, or you can buy a will kit. It is however a good idea to ask a solicitor to review your will to make sure everything is in order. If a will isn't signed and witnessed properly, it will be invalid.
If you die intestate (that is, without a will) or your will is invalid, an administrator appointed by the court pays your bills and taxes from your assets, then distributes the remainder, according to the laws in the relevant country, state or territory. Which may not be how you want your assets to be distributed.
To make sure the person managing your estate can easily locate all of your financial information, set up a file listing all your assets, liabilities, insurance policies and other financial information.
A will can also contain details of who will take legal guardianship of dependent children should something happen to both parents. This is usually someone you trust to raise your children in a similar way to how you are raising them, and someone who has the emotional and financial capacity to take on that responsibility.
Depending on the laws in your country you may not be able to finalise paperwork with reference to unborn children, but you can at least have everything prepared, so that all you have to do after the birth is sign on the dotted line.
10. Do As Much As Possible NOW, Well In Advance Of Your Baby’s Birth & Put What You Can On Autopilot.
Address And Action The Previous 9 Items I Listed.
Automate your savings.
Automate your bill payments where you can.
Schedule - and set a reminder - for certain dates you need to pay or check bills and account balances.
Set regular finance dates to review your finances and ensure you stay in control & on track so you don’t have to think or worry between those dates.
With your finances in check, you have one less thing to worry about and you can focus on, and delight in, the joy of motherhood.
And if you need some help, please don’t hesitate to give me a call on +61 413 588 537 or email me at firstname.lastname@example.org to see if my Fabulous Prepare for Baby Financial Program is right for you.
You deserve to enjoy the peace and joy of motherhood without fear for your financial security or future.
And you can!
I was 41 when I became a mum and it was a huge financial wake up call for my husband and I. Despite having well-paid jobs for over 20 years, we had relatively little to show for it. We had our superannuation and a healthy deposit for a house. That was it!
How on earth were we going to support and educate a child, provide for our retirement, buy and make a home, and still enjoy our lives?
Not to mention I was on unpaid maternity leave for a year. And I only wanted to go back to work part time. At least until our daughter was a little older.
We got ourselves a financial planner and thought we were set. But, eighteen months later we realised that we just weren’t making the progress we wanted, or needed. It was time to step up, accept responsibility for, and take control of, our personal finances.
The results were remarkable! We found what I called our “money groove”. And despite our reduced income, additional family expenses and the GFC, we tripled our net worth in 7 years! Without having to give up what we loved in life.
We achieved the flexibility, security and freedom we did not even dream of realising for many years to come (if ever).
And no, we did not live like misers. We did not make our own soap, cleaning products or gifts (with the exception of my daughter who enjoys making cards & gifts for us and her friends).
We bought and did what was important to us. We made our house a home, we went out to dinner, we enjoyed 2-3 holidays per year and lived a full, healthy & active lifestyle.
I wanted to share what I had learnt and help others. I wanted to create something that would really make a difference. Something with the power to transform people’s finances and lives. Something fabulous!
I threw myself into my research. Completed a 12 month coaching course. Reflected on and examined professional and personal experiences, successes & failures.
Then, after nearly 30 years helping organisations manage their money, in 2013 I established Financially Fit & Fabulous, to help women transform their finances and create the financial security and freedom to choose and live a fabulous life they love.
I truly hope this podcast and the Prepare for Baby Financial Checklist helps you avoid the potential financial pressures of starting and growing a family.
My heartfelt best wishes for your fabulous journey to motherhood,
 Australian Bureau of Statistics, Catalogue No. 4102.0 - Australian Social Trends, 2014
Manuela Andrysik spent nearly 30 years helping large organisations save and make more money before launching Financially Fit & Fabulousto help you get More Life for Your Money, More Money for Your Life™.
A qualified accountant, trained life coach, wife, mum and bargain lover, Manuela brings together her extensive skills, experience and research to help you whip your personal finances into shape.
Particularly if you don’t like that “b” word – “budget” - and want to live a fabulous life you love without guilt or fear for your financial future.
Once referred to as the Marie Forleo of finance, Manuela’s comprehensive and practical approach adds a touch of fun and fabulousness to an otherwise boring and potentially stressful topic.
When she’s not helping people eliminate debt, turbo charge their savings and transform their finances, you can find her having fun with family & friends, reading a hot novel or planning a fabulous holiday.
Join her at financiallyfitandfabulous.me to create the financial security and freedom to choose and live a fabulous life you love - without having to deprive yourself of your sweet treats in life.